The moment when you finally take the leap and start your new business is a very exciting one. It’s tempting to start with the bits you like the best, like shopping for stationery, fitting out the home office or ordering random items like mugs and mouse pads with your new business name.
But something you should look at and get into place from the very start is bookkeeping. I know, it doesn’t sound as much fun, but Future You is really going to thank you for the time you spend now to get this right, trust me.
Bookkeeping for your new business doesn’t need to be scary or complicated. It’s just a matter of getting the right few systems into place from the start, and launching some very good habits as soon as you can.
The beauty of habits is that once you’ve got them down, they require little stress to keep going with. Skills like these get faster and easier with practice.
Here is my list of things to start with to absolutely nail bookkeeping for your new business.
Top Ten Things to Start With When Bookkeeping for Your New Business
1. Separate business and personal finances
This step is so key that I’ve devoted a whole article to it check it out here. Start with setting up a business bank account and stick to tracking all expenses and income from your business separately to your personal money.
It is tempting to use personal money to pay for business expenses when your business isn’t generating much income yet, and it’s also tempting to take some of your business money here and there to pay yourself when you don’t have solid enough earnings to give yourself a wage.
If you set up a business account from the beginning and make sure that you stick to using it just for business, you will find things easier down the track.
2. Set a schedule for all your reporting requirements
Inform yourself about when your reports and returns are due to the ATO, and set a schedule (and reminders!) for these now. At the very least, this will involve annual and then quarterly reporting, and may also require up to date reporting for any employees you have as well.
3. Look into the best software for you
There are a range of bookkeeping software options for small businesses, and most of them are easy to master. Software programs are wonderful for automating processes and reminding you of the steps you need to keep on top of.
They also make everything easily accessible so you can process payments, generate invoices and more on the go, while storing your data in the cloud. Bookkeeping software can be used on any smart device including phones, tablets, and laptops, meaning you can keep up to date with your recording wherever you are.
4. Keep records
Now is the time to start keeping regular bookkeeping records – and then put processes into place that you’ll stick to month after month, year after year.
This includes keeping your accounting software up to date, and also includes setting up a filing system and safe place to keep all paper-based evidence as well.
5. Track all money coming in
Whenever you receive a payment for your business, make sure it is tracked using your accounting software before it goes back out again.
If you deal in cash from your customers this can be a big problem.
Don’t just stick a cash payment in your wallet and then pull it out again the next time you need to pay for something for your business. Track and record every cent that comes in before it goes out again (and also track what you use it for when it goes out too!)
6. Keep an eye on what you are owed
You might be on top of invoicing your customers, but making sure they are all paying their accounts on time is another task entirely.
Set aside time monthly to track all of your outstanding accounts and make sure invoices are paid – you may need to implement some systems or incentives to help people to pay on time.
7. Outsource for your own sanity
There are levels of bookkeeping assistance that you can outsource, depending on how much time you have and how confident you feel with managing the finances for your business. For example, you can use an accountant just at tax time, or invest in a bookkeeper to help you more regularly and keep records and reporting on track.
You might even look into a bookkeeper to track all of your finances for you – outsourcing a few hours a week for this purpose could free you up to focus on other aspects of your business, and could make the most sense in terms of smart use of your time and resources.
8. Book in weekly bookkeeping time
From Day One, schedule in a weekly time to do your bookkeeping and keep all of your records up to date. If you do this weekly it won’t take up too much of your time, and it will never get to the point where it becomes overwhelming.
9. Educate yourself on tips and advancements in bookkeeping
Subscribe to blogs like this one to keep expanding your knowledge of bookkeeping tips and advice, and to keep on top of changes in your requirements.
There is always a new process or program coming out to help you track or automate things like your employees hours or travel logs. Follow writers like me who can simplify the topics and help you learn and your business to grow.
10. Face your fears and do it anyway
This is great advice for anything, really, but applies perfectly to bookkeeping for your small business. Many people don’t arm themselves with basic bookkeeping skills and financial understanding because the idea of numbers has something unknown and scary about it.
When you are just starting out with your business, this is the best time to face your fears about bookkeeping, inform yourself about the basics, and just jump in and start swimming. Even if you outsource to an accountant or bookkeeper, you should learn the basics so that you can tell if everything’s shipshape and on track when your books are presented to you.
And if you still aren’t sure where to start, I can help. Get in contact to find out more about my tailored services for your business today.